How Premium Bonds Work
Last reviewed: June 2026
Premium Bonds are a savings product from NS&I (National Savings and Investments), which is backed by HM Treasury. Instead of paying interest, every eligible £1 Bond number is entered into a monthly prize draw. This guide explains the mechanics in plain English, with the figures published by NS&I.
What Premium Bonds are
Premium Bonds don't pay interest. Your money isn't at risk because it's held with NS&I (backed by HM Treasury), but instead of a guaranteed return, each whole £1 you hold becomes a separate Bond number with its own chance of winning a tax-free prize each month.
- •Minimum: you can buy from £25.
- •Maximum: you can hold up to £50,000 in total.
- •Each £1 = one chance: hold £1,000 and you have 1,000 Bond numbers in every monthly draw.
Source: NS&I — Premium Bonds.
How the monthly prize draw works
Once a month, NS&I's random-number generator — named ERNIE — picks winning Bond numbers. Prizes range from £25 up to £1 million, and every prize is tax-free (exempt from UK Income Tax and Capital Gains Tax).
How much is paid out is set by the prize fund rate. From the July 2026 prize draw, NS&I sets this rate at 3.80% a year (variable), with the odds of each £1 Bond number winning a prize at 22,000 to 1. (Until the June 2026 draw, the rate was 3.30% and the odds were 23,000 to 1.) Both figures are variable — NS&I publishes the current numbers.
Source: NS&I — Premium Bonds (rates effective from the July 2026 prize draw).
What a single month's draw looks like
To make the numbers concrete: in the June 2026 prize draw, NS&I awarded 5,954,593 prizes with a combined value of £376,627,975. We check your numbers against this same published prize list.
Figures from the NS&I prize draw published 2026-06-01.
How to check whether you've won
After each monthly draw, you can check your holder's number against the published winning numbers. With this tool you can check several accounts at once and keep your numbers on your device for next month — no login, nothing stored on our servers.
Premium Bonds: common questions
What are the odds of winning the Premium Bonds draw?
From the July 2026 prize draw, NS&I sets the odds of each £1 Bond number winning a prize at 22,000 to 1 (until the June 2026 draw it was 23,000 to 1). The odds are variable and NS&I publishes the current figure.
Are Premium Bond prizes taxed?
No. According to NS&I, all Premium Bond prizes are tax-free, meaning they are exempt from UK Income Tax and Capital Gains Tax.
How much can I hold in Premium Bonds?
You can buy from £25 and hold a maximum of £50,000 in Premium Bonds, per NS&I. Each whole £1 is a separate Bond number with its own chance of winning.
Do Premium Bonds pay interest?
No. Instead of paying interest, Premium Bonds enter every eligible £1 Bond number into a monthly prize draw run by NS&I's draw machine, ERNIE. Prizes range from £25 up to £1 million.
This site is independent and not affiliated with, endorsed by, or connected to NS&I (National Savings and Investments) or HM Treasury. Figures are taken from NS&I's publicly available information and prize draw data and may change — always check nsandi.com for the current terms. This is not financial advice.